GST on Garba! Why tax on this Navratri event? Decoding new taxation system

Exemption from the GST only applies to organizers charging less than Rs 500 per pass.

GST on Garba! Why tax on this Navratri event? Decoding new taxation system
Thousands of people gather at the various locations of a Garba to dance to the music of Gujarati folk songs.

Navratri Garba performed during the nine days of Navratri to honor the Goddess Ambe, is one of the most popular festivals in Gujarat. Thousands of people flock to the state to attend the event, which begins on September 26 and ends on October 5 this year. With the advent of the festival, many organizers have already opened their sales for the event. However, due to the implementation of GST, the prices of passes have increased. Exemption from the GST only applies to organizers charging less than Rs 500 per pass.

The Congress party protested outside the collector’s office in Vadodara on Thursday, August 4, to demand a rollback of the implementation of the Goods and Services Tax (GST). According to Jairam Ramesh, a Rajya Sabha member and an opponent, the tax should be called the Garba Samaapt (discontinue Garba) tax.

Why the government promotes the event of Garba

Navratri is a Gujarati word that literally means nine nights. In the state, the festivities are celebrated with rich Garba dances and various other rituals to honor and worship the Goddess Ambe. During the festival, people are also able to worship a lamp made out of earthen pots. This symbol of the power of the mother goddess is regarded as a symbol of new life.

The festival has been regarded as one of the most popular festivals in the state. It has also attracted tourists from various parts of the world. In 2003, the Gujarat government organized the “Vibrant Navratri” in the city of Ahmedabad. This event, which started in the evenings, has additionally been regarded as an important part of the state’s development. During his time as the chief minister of the state, Narendra Modi referred to the event as the world’s longest dance festival.

What are this new taxation and the hullabaloo about

Since the implementation of GST in 2017, the organizers of the event for the first time have been asked to charge a direct tax on entry tickets for the Garba event. The United Way of Baroda (UWB) biggest organizer of the event, opened its registration last week. According to a notice posted on its website, the registration fee has increased significantly. The men’s fee has gone up to Rs 4,838, while the women’s fee has been set at Rs 1,298.

Officials of the central government, who inspected the city events in 2019, claimed that the organizers of the event failed to comply with the notifications issued by the government regarding the implementation of GST on entry tickets during its Garba events in 2017. Because of the pandemic, the state did not see large-scale festivities in 2020 and 2021.

While the opposition parties criticized the government for imposing a heavy tax on a religious event, leaders of the ruling Bharatiya Janata Party (BJP) were also reportedly fielding requests from the organizers and participants to exempt the event from the tax.

Minesh Patel, Treasurer, and Trustee of the UWB told the Indian Express that passes or identity cards issued for a fee or against an invoice would automatically make it liable for GST.

Mayank Patel of the Vadodara Navratri Festiva said that the organizers would not pass the burden of GST on the participants as they contribute to the police welfare fund. However, they would pay the 18 percent tax on the ticket sales from their revenue. He additionally noted that the entry tickets for males were priced at around Rs 1,000 and above.

What are the GST rules for entertainment/commercial events

A senior official of the GST department in Gujarat stated that no changes have been made regarding the implementation of the GST on the Garba. During the pre-GST period, the service tax was charged on the entry tickets of the event if the total amount charged for the admission exceeded Rs 500. There were also embedded taxes due to the credit of VAT that was not available for payment of the service tax.

According to the official, the 18 percent tax rate on the entry ticket of a Garba or event is still applicable if the total amount paid for the admission exceeds Rs 500. This means that the tax rate under the new regime has not changed. In June 2017, the government had notified that the entry ticket of a certain event would be liable to be charged 18 percent tax if the total amount exceeded Rs 500.

Why was GST not levied in the last four years

The UWB stated that the Garba event was not considered an entertainment event under the GST. Instead, it was focused on providing various services to the public, such as food stalls and the setting up of multiple structures. Hemant Shah, the Chairman of the UWB’s Resource Development Committee, said that the organization does pay the tax on the services provided by the vendors but the money collected from the passes goes to a charitable cause. He added that the donations received from the passes are used to fund the activities of the UWB, which is an NGO. Every penny that the organization saves through the sale of passes goes to the poor and vulnerable.

Why is Garba considered a commercial event by government?

Usually, commercial Garbas are hosted by organizations or clubs, such as the UWB. These types of events usually have entry passes that are priced at around Rs 1,000 and above. In major cities, the prices of these passes vary depending on the type of event. According to the organizers, the annual revenue generated by the events is around Rs 7,000 cr. This includes the profit that the large-scale commercial outfits make from the event, as well as the various allied businesses that are associated with it, such as the food vendors, sound systems, and decorators.

Besides the grand prizes that are offered at the end of the nine-night event, the commercial venues also have various prizes, such as two-wheelers and four-wheelers. While the large-scale commercial outfits have the necessary equipment and resources to host the events, the smaller community-based Sheri Garbas are usually organized by local residents.

Thousands of people gather at the various locations of a Garba to dance to the music of Gujarati folk songs. The UWB’s biggest event is usually held in the city of Vadodara. It has around 30,000 participants at any given point and 15,000 viewers.

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